Market Indexes: The market is reacting first and foremost to news about the coronavirus, even more than to earnings releases and economic reports. This week was an up week, as fears about the virus’s spread appeared to wane, along with perceived economic fallout.
“China’s National Health Commission on Wednesday said 2015 new cases of the disease caused by the new viral infection had been reported over the last 24 hours, declining for a second day. That brought the number of cases in mainland China to 44,653, although experts have warned that a substantial number may have gone uncounted. The commission said there were 97 additional deaths from the virus in the last 24 hours, bringing the mainland total to 1,113.” (MarketWatch)
“Investors are edging back into emerging markets, even though worries about the coronavirus’ impact on global economic growth have clouded prospects for the boom-and-bust asset class. Nearly $730 million flowed back into emerging markets exchange-traded funds (ETFs) in the past week, according to Lipper, after two straight weeks of outflows that accompanied sharp declines in the stocks and currencies of developing countries. As of Friday, the coronavirus has infected 63,581 people and killed 1,380. Still, investors have grown more hopeful that economic damage will be limited.” (Reuters)
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Volatility: The VIX fell -11.57%% this week, ending the week at $13.68.
High Dividend Stocks: These high yield stocks go ex-dividend next week: HRZN, MAIN, HCAP, MAC.
Market Breadth: 19 out of 30 Dow stocks rose this week, vs. 3 last week. 78% of the S&P 500 rose, vs. 84% last week.
FOREX: The USD fell vs. the pound, the Loonie, and the New Zealand and Australian dollars, and rose vs. the yen, the Swiss franc, and the euro, which hit a 4-month low vs. the USD.
Economic News:
“Oil prices rose over 3% on Wednesday as China reported its lowest daily number of new coronavirus cases since late January, stoking investor hopes that fuel demand in the world’s second-largest oil consumer may begin to recover. OPEC recommended a further cut of 600,000 bpd last week to stem the oil price fall. OPEC is now waiting for a response from Russia as to whether Moscow would help execute the cuts. Most Russian oil companies want OPEC’s global output curbs to remain in place for one more quarter.” (Reuters)
“Fed Chief Powell called out for the second day his concerns about the rise in U.S. debt. “I would say, be concerned now,” he said. With debt to GDP growing quickly, he said, “what it means is, 20 years from now …our children will be spending those tax dollars on servicing the debt, rather than on the things they really need.” (Reuters)
Week Ahead Highlights: US markets will be closed on Monday, Feb. 17th, for President’s Day. There will be several Housing-related reports due out, in ddition to the Leading Economic Indicators report, which will come out on Thursday.
Next Week’s US Economic Reports:
Sectors: Real Estate, Utilities and Consumer Discretionary led, Basic Materials lagged.
Futures: WTI Crude rose 3.4% this week, finishing at $52.25, rising on the slowing spread of the coronavirus, in addition to potentially longer and deeper production cuts from OPEC and Russia.
